If Congress continues to let Medicare provider reimbursement increases soar, the House health bill could increase the federal budget deficit by $141 billion over 10 years.
The Concord Coalition, Arlington, Va., has published that estimate in an analysis of the bill, H.R. 3962, the Affordable Health Care for America Act.
The Senate Finance Committee’s health bill — S. 1796, the America’s Healthy Future Act bill – would try to hold down federal health care spending by limiting future increases in the rates that Medicare pays to doctors.
CBO analysts note in their review of S. 1796 that, up till now, Congress never has gone ahead with letting limits on Medicare reimbursement rate increases take effect.
H.R. 3962 also includes a provision that would curb Medicare provider rate increases.
Successfully putting a brake on Medicare reimbursement rates “is unlikely to happen, particularly in the absence of a Medicare Commission (such as that contained in the Senate Finance bill) to monitor costs and recommend new savings with an up-or-down vote in Congress,” Concord Coalition Executive Director Robert Bixby warns in a comment on H.R. 3962.
With a “Medicare doc fix” included in the H.R. 3962 budget impact analysis, the bill would increase the budget deficit by about $14 billion per year over the next decade, Bixby predicts.
Another bill provision, the Community Living and Assistance Services and Support Act section, would start a voluntary, government-run long term care program. Participants would have to pay into the program for several years before they could file claims.
The CLASS Act section would help reduce the budget impact of H.R. 3962 in the early years, because it would collect and store premium payments from program participants, Bixby writes.
But, if Congress creates an LTC program, it should let the early premium payments build up in an LTC program fund and use the cash to pay future participant claims, not use the revenue to balance the budget, Bixby writes.
The proposed use of CLASS Act premium revenue to balance the budget is “a repeat of the Social Security cash surplus ‘raid,’” Bixby writes.
H.R. 3962 could raise $461 billion in revenue over 10 years through a section that would impose a 5.4% surtax on individual taxpayers earning more than $500,000 and couples earning more than $1 million.
But the surtax would “do nothing to encourage lower spending on health care,” Bixby writes.
The CBO did not make any projection of what H.R. 3962 might do to public or private national health care expenditures, and “it’s unclear if the bill would have a major impact on lowering private costs,” Bixby writes.
Predicting how measures such as requiring patients to choose “medical homes” or changing provider reimbursement systems would affect health care expenditures “would, in fact, be very difficult to do,” Bixby writes. “Thus, the long-term effect of these policies is highly uncertain, at best. This is the risk of expanding coverage before testing cost containment strategies.”